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Oregon violated laws by allowing health plans to be extended, according to legislative lawyers

Dennis Richardson, Peter Buckley

Rep. Dennis Richardson, R-Central Point, right, asked the legislature's lawyers whether it was legal for Oregon to allow insurers to extend policies that didn't meet coverage standards under Obamacare into the new year. Their answer was no.
(Michael Lloyd/The Oregonian)

This post has been updated with comment from Oregon's insurance commissioner.

The Oregon Legislature's lawyers think the state erred when it allowed insurers to extend health plans set to expire this year under the provisions of the Affordable Care Act.

More than 140,000 Oregonians faced Dec. 31 cancellations of their health insurance until Oregon Insurance Commissioner Laura Cali announced that insurers could extend those policies until the end of next year.

"We're adding chaos upon dysfunction," said Richardson, who is running for governor.

Critics of the health care law have hammered President Barack Obama and other Democrats for claiming that Americans would be able to keep their insurance plans under the new law, even though a small subset of consumers have plans that don't meet minimum standards under the law and were set for cancellations.

Obama offered up a plan to extend those policies into next year and roughly half the states, like Oregon, have implemented it.

In a Dec. 2 opinion, Lorey Freeman, senior deputy legislative counsel, wrote that allowing the extension essentially allowed companies to renew those policies in violation of federal and state law.

"The commissioner's announcement that she will allow all health benefit plans that were in effect on Oct. 1, 2013, to continue through the end of 2014 allows noncompliant plans to continue for up to 12 months longer than the ACA allows," Freeman wrote. "Therefore, we believe the commissioner exceeded her legal authority."

Cali said Oregon structured the extension to specifically to comply with the law. Insurance companies need to extend plans this year for coverage to carry forward into 2014.

"We very purposefully have implemented this so that the renewals have to occur in 2013 for exactly that reason," Cali said. "I think we’ve been really clear in the guidance we’ve provided to insurance companies. If you issue a plan on Jan. 1 it has to comply with ACA and it has to comply with Oregon law."

The legal opinion isn't binding and a court could certainly disagree. It's also unclear who would have standing to bring a challenge to the extension before a court. But similar legal concerns about extending plans have stymied the extension of plans in other states.

Richardson said if a change to the law was needed, Gov. John Kitzhaber should have called the Legislature into session for a fix.

"It violates our constitution. It was an inappropriate decision," Richardson said. "If it was that important you call a special session and the Legislature makes a change. It's not up to the executive branch to do that."